WASHINGTON—In another sign that economic growth may be slowing, small business confidence fell to a two-year low in March amid persistent worries about sales and profits.
The National Federation of Independent Business reported that its small business optimism index dipped 0.3 point to a reading of 92.6 last month, the lowest since February 2014.
The index has declined from a reading of 100 in December 2014 and has pushed further off its 42-year average of 98.
"A 'chartist' looking at the data historically might conclude that the index has clearly hit a top and is flashing a recession signal. The April survey will decide whether or not the alarm should be rung," the NFIB said in statement.
Regulations top the main concerns for small businesses with taxes coming in second, according to the NFIB index. Some small businesses also indicate that rising labor costs are keeping them from hiring. California and New York recently passed gradual raises to minimum wage. One expert said this shows that small businesses will continue to find ways to do more with less labor, the League of Southeastern CUs & Affiliates noted in its newsletter.
The small business owners also say that they are more likely to cut prices to jump start spending rather than raise prices to gain more profit.
“This is something credit unions should monitor as members see more increased job and work pressures or small businesses look for more capital,” LSCU noted.